British taxpayers will fund an £80million aid giveaway in Brazil, Chancellor Philip Hammond announced yesterday.

Mr Hammond unveiled the promise during a visit to the ninth-largest economy in the world.

He said the money would help reduce poverty and fund economic development – but last night critics said it was wrong to give cash to richer developing countries such as Brazil.

Backbench Tory MP Peter Bone said: ‘How can this possibly be the right thing to do? It’s one thing to give money to help Syrian refugees near to conflict zones. It’s another entirely to give £80million to the world’s ninth-largest economy. In fact it’s nuts.’

Mr Hammond (pictured) unveiled the promise during a visit to Brazil, the ninth-largest economy in the world

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The cash comes from the five-year £1.3billion Prosperity Fund which is designed to improve growth in developing countries. A report by the aid watchdog in February said use of the fund for richer developing countries should be restricted.

The Independent Commission for Aid Impact warned of ‘serious risks’ about the effectiveness of the Prosperity Fund, saying it was ‘fragmented’ and lacked transparency.

Mr Hammond made the announcement in a joint statement with the Brazilian finance minister. They said the cash is designed to ‘support Brazil in targeted areas of its economic development and poverty reduction efforts’.

The statement continued: ‘This partnership will also expand the potential for global trade, catalyse investment and increase opportunities for international business in Brazil, helping to secure Brazil’s economic growth.’ Speaking in Brazil, Mr Hammond added: ‘Today’s dialogue has created exciting new opportunities for partnership between the UK and Brazil, Latin America’s largest economy.

Mr Hammond made the announcement in a joint statement with the Brazilian finance minister. They said the cash is designed to ‘support Brazil in targeted areas of its economic development and poverty reduction efforts’. Pictured: A general view of Rio de Janeiro, Brazil

‘I am very pleased to be accompanied by executives from some great British companies with world-leading expertise, to help facilitate deeper economic and trade links between our two countries.’

But Ukip MEP Gerard Batten warned Brazil was also a ‘notoriously corrupt’ country. ‘Britain is strapped for cash,’ he said. ‘But we are sending hard-earned taxpayers’ money to one of the most quickly-growing economies in the world. It also happens to have one of the worst records for corruption.’

Mr Hammond’s South American tour, which saw him fly to Argentina last night, is designed to pave the way for British firms to export to the continent.

Support for trading with Brazil from government agency UK Export Finance, which aims to ensure no viable UK export fails for lack of finance or insurance, is to double to up to £3billion.

Backbench Tory MP Peter Bone (pictured) said: ‘How can this possibly be the right thing to do? It’s one thing to give money to help Syrian refugees near to conflict zones. It’s another entirely to give £80million to the world’s ninth-largest economy. In fact it’s nuts'

The Treasury said the Brazilian Granito Group is also to base the headquarters of its new global investment bank – Granito & Capital – in London, while UK-based GP Laboratories plans to export £11million of pharmaceuticals to Brazil over the next five years.

Mr Hammond is today holding talks with Argentine president Mauricio Macri and senior ministers as well as British and Argentine businesses.

Among those accompanying Mr Hammond are senior figures from the London Stock Exchange, Transport for London, the Bank of England and the Green Investment Bank.

A Treasury spokesman said: ‘We are building new trade and investment ties around the world and the cross-Whitehall Prosperity Fund, announced in 2015, will create opportunities for British businesses by supporting sustainable development overseas.’